Jefferson Security Bank Announces Fourth Quarter Results and Full Year Results

Jefferson Security Bank (OTCBB: JFWV) reported net income of $871 thousand for the fourth quarter of 2020, compared to $743 thousand for the fourth quarter of 2019. Basic and diluted earnings per common share were $3.12 and $2.66 for the fourth quarter of 2020 and 2019, respectively.

For the year ended December 31, 2020, net income totaled $2.88 million, representing an increase of $78 thousand or 2.8% compared to net income of $2.80 million for the year ended December 31, 2019. Basic and diluted earnings per common share were $10.30 and $10.02 for the years ended 2020 and 2019, respectively. Return on average assets and return on average equity were 0.82% and 9.67%, respectively, in 2020 compared to 0.89% and 10.84%, respectively, in 2019. For the year ended December 31, 2020, the provision for loan losses totaled $800 thousand, representing an increase of $657 thousand from $143 thousand for the year ended December 31, 2019.

“In reflecting over the past year, I am proud of our team and their ability to adapt and support our customers and communities during these challenging times,” said Cindy Kitner, President and Chief Executive Officer. “We are pleased with our performance which resulted in record earnings in spite of significant increases in expense related to the provision for loan losses which was driven primarily by economic uncertainty. Our performance demonstrates the resilience of our employees, customers and communities, along with our efforts targeted at managing funding costs, controlling operating expenses and effectively managing risk. Our management team remains committed to executing our strategic priorities and building on our strong foundation to drive results for our shareholders,” said Cindy Kitner, President and Chief Executive Officer.

The Bank’s total assets were $380.7 million as of December 31, 2020, an increase of $56.3 million or 17.4% from total assets of $324.4 million as of December 31, 2019. Loans, net of reserve, totaled $239.9 million as of December 31, 2020, an increase of $22.6 million or 10.4% from $217.3 million as of December 31, 2019. At December 31, 2020, the Bank had a total gross balance of loans outstanding of $14.3 million from the Small Business Administrations’ (“SBA”) Paycheck Protection Program (“PPP”) in accordance with the Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, 2020 (“CARES Act”), as amended.

Total deposits increased by $63.4 million or 22.4% to $346.4 million as of December 31, 2020 compared to $283.0 million as of December 31, 2019. Total shareholders’ equity increased by $3.6 million for the year ended December 31, 2020, primarily as a result of net income of $2.88 million and a decline in accumulated other comprehensive loss of $1.25 million. As a result, the Bank’s book value increased to $111.02 per share at December 31, 2020 compared to $98.16 per share at December 31, 2019.

Jefferson Security Bank continues to be committed to supporting the community and our customers during these unprecedented times. “During the year, the Bank originated 327 PPP loans totaling $15.4 million. With the issuance of new guidance, we continue to work with our borrowers through the forgiveness process while accepting applications for the second round of PPP lending,” said Jenna Kesecker, Executive Vice President and Chief Financial Officer. The Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act was passed as part of the Consolidated Appropriations Act (“CAA”) and signed into law on December 27, 2020. The CAA provides additional COVID-19 stimulus relief and includes $284 billion in funding for additional PPP lending through the SBA. The program offers new PPP loans to small businesses and nonprofits that did not receive a PPP loan in 2020, and also provides a second draw forgivable PPP loan targeted at the hardest-hit businesses that have already spent their initial PPP proceeds and who can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. “We are participating in this new round of funding to ensure local small businesses and nonprofits in or community have access to this vital funding as the duration of the pandemic remains unknown,” said Jenna Kesecker, Executive Vice President and Chief Financial Officer.

In addition to participating in PPP lending, the Bank also implemented payment relief options to support its customers including the deferral of loan principal and interest payments. Following the onset of the pandemic, the balance of loans on payment deferral or extension reached 11.8% of the total loan portfolio, excluding PPP loans. As of December 31, 2020, the Bank had 3.6% of the loan portfolio, excluding PPP loans, on deferral or extension. Management continues to focus on assessing the risks in the loan portfolio and working with customers to mitigate this risk where possible.

The Bank continues to follow established business continuity and resiliency plans. “Since the start of the pandemic, we have used conservative measures to keep our employees, customers and communities safe, while continuing to deliver essential banking services through our drive-through facilities, digital banking platforms, curbside banking services, ATMs and in branch activities by appointment only,” said Cindy Kitner, President and Chief Executive Officer.

About Jefferson Security Bank

Jefferson Security Bank is an independent community bank evolving with the needs of the customers and the communities it serves. Serving individuals, businesses and community organizations, Jefferson Security Bank strives to support entrepreneurial efforts within its target markets. Delivering long-term value to its shareholders is at the core of the organization’s culture. Jefferson Security Bank is a West Virginia state-chartered bank that was formed and opened for business on May 19, 1869, making it the oldest bank in Jefferson County, West Virginia. The bank provides general banking services in Berkeley County and Jefferson County, West Virginia, and Washington County, Maryland. Visit www.JSB.bank for more information

This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections.

Offices: 105 East Washington Street, Shepherdstown, WV (304-876-9000)
7994 Martinsburg Pike, Shepherdstown, WV (304-876-2800)
873 East Washington Street, Suite 100, Charles Town, WV (304-725-9752)
277 Mineral Drive, Suite 1, Inwood, WV (304-229-6000)
1861 Edwin Miller Boulevard, Martinsburg, WV (304-264-0900)
103 West Main Street, Sharpsburg, MD (301-432-3900)